Budget: Alcohol, tobacco
Beer drinkers cheered by ‘Brexit pubs guarantee’
Beer drinkers will be raising a glass to Chancellor Jeremy Hunt after he introduced a ‘Brexit pubs guarantee’ to keep down the price of pints.
The initiative will kick in from 1 August and will mean the duty on tap beer in pubs will be up to 11p lower than in supermarkets.
Addressing the House of Commons as he delivered his Spring Budget, Hunt said: “Today, I will do something that was not possible when we were in the EU and significantly increase the generosity of draught relief.
“So that from 1 August the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential a Conservative government will maintain as part of a new Brexit pubs guarantee.
“British ale may be warm, but the duty on a pint is frozen.”
Wine drinkers didn’t fare so well, with the price of a bottle set to rise by nearly 50p courtesy of a ‘double dunt’ tax hike.
Duty on alcohol will rise with inflation, at the same time as Westminster reforms the levies based on a drink’s alcoholic strength.
Industry figures have warned that the twin changes – after levies were frozen last year to help firms – could mean a 20% increase in tax on drinks including red and white wine, adding 44p to an average bottle.
There is a 10% tax hike on distillers, prompting claims of betrayal from whisky producers after there had been a previous pledge to “review alcohol duty to ensure our tax system is supporting Scottish whisky”.
Mark Kent, CEO of the Scotch Whisky Association, said: “This is an historic blow to the Scotch whisky industry.
“The largest tax increase for decades means that 75% of the average priced bottle of Scotch Whisky will be collected in tax, reducing already tight margins for an industry which employs tens of thousands of people and invests hundreds of millions annually across the UK.
“We have been clear with the UK Government that increasing duty would be the wrong decision at the wrong time, so it is deeply disappointing that one of Scotland’s largest and longest-standing industries has been treated in this way.
“In addition, the Chancellor has chosen to further increase the competitive disadvantage faced by the industry in the UK by giving additional tax breaks which are not available to the vast majority of distillers.”
Smokers have also been hit hard with tobacco tax rising in line with inflation.
That will take the average price of a packet of 20 cigarettes to more than £13.